Tokenomics: Intro to Price-Based Vesting Schedule

The standard practice for vesting schedules in the crypto-industry is often a very short vesting schedule based on time regardless of financial performance of the token economy. While I would recommend to avoid pre-minted token allocation entirely, in certain circumstances, web3 founders still prefer to allocate a portion of tokens to themselves. In this blog post, I will brainstorm on the possibility of a better vesting mechanism to protect the community investing in token economies.

Standard Time-Based Vesting Schedule

It is very common in the crypto-industry to see vesting schedules for founders of web3 companies to fully vest their token within the first 2 years after launch of the token. This leads me to believe that founders are launching tokens after tokens just to make a quick buck with zero consequences to the sustainability of the project and their community. I am highly worried when I see a portion of the team token unlocking at TGE (token generation event is when the token becomes publicly traded on an exchange) itself, which is very likely to lead to the team cashing in some gains at the very beginning. It would be like a tech startup founder selling their shares as quickly as possible instead of trying to build their business.